FuelCell Energy shares sink on third-quarter miss

Rob Varnon

Published
9:10 pm EDT, Thursday, September 6, 2012

FuelCell Energy Inc. executives say the future of the company is brightening as international orders and even projects in its home state are becoming realities. But their optimism couldn't stop shares in the Danbury-based company from dropping below $1 Thursday after a disappointing third quarter

Specifically, he said projects in Bridgeport, London, Germany and Korea are coming into focus. And he also noted the firm has won significant research contracts from the U.S. military, including one that involves creating a power source for an unmanned airplane that can fly for five-year stretches.

Still, shares in FuelCell energy dropped as much as 15 percent to 85 cents during the day, before closing at 89 cents, down 11 percent.

The company, which produces fuel cells for baseload energy production, reported a net loss of $10.7 million, or 6 cents a share for the three months that ended July 31. For the same period last year, the company lost $8.5 million, or 7 cents a share. Revenues dropped to $27.5 million from $29.3 million the year before

Analysts were expecting a loss of 5 cents on revenues of $31.9 million, according to FactSet Research.

Mike Bishop, FuelCell's chief financial officer, said the company is moving to a run rate that will lead to profitability.

Bottone said the company is close to signing a 120-megawatt order from its Korean partner PASCO Energy. He also said a newly formed joint venture in Germany closed its first sale last month for a high- profile government building fuel cell project in Berlin. The hope is that will lead to larger orders, Bottone said.

The company also said it has lined up a project in London and is seeing continued strength in Asia.

Bottone also said the firm is finally moving forward with its Bridgeport Fuel Cell Energy Park.

"It's about a $70 million project," Bottone said, "We're in active discussions to finance the project."

The energy park in Bridgeport, which is to be built on the West End near the old Hubbell building site, has been on the table for years.

James Murkette, president of PurePower LLC, which developed the original proposal for the Bridgeport energy park, said FuelCell Energy has taken the lead on the project and as far as he knows it is pressing to get the financing for it. He said it is moving forward.

One analyst on the call said it was a good sign Bridgeport is moving forward.

Bottone noted there are opportunities opening up in the U.S. market, especially for providing power to data centers.